During the last two months, the Fed has cut interest rates twice trying to stimulate the economy. The impact that this has on savers (with fixed interest rate accounts or bank CD’s) is largely negative, because it will lower the interest rates they can receive on newly issued fixed rate accounts. As for the impact on the stock market, it hinges on trust that the Federal Bank is under control of the economic situation in the United States. It’s not abnormal to see a rise in the stock market in the short-term when the Fed has cut rates, because they anticipate increased spending and borrowing rates.

One of the primary issues we face is inflation, and these cuts don’t necessarily help. Prices chase the availability of money, and since more money just became available, (less going into fixed rate vehicles, or less being retained by savers) prices will tend to increase rather than decrease.